31 October, 2016

Taking decisions in competition cases - a balancing act

An evergreen amongst questions discussed in competition law enforcement is whether competition authorities that investigate infringements of competition law and assess merger applications should also be able to adopt a first decision in these cases, or whether that task should be left to the courts. The European Commission, for example, has that right, as do a number of national competition authorities in the EU. Whether such an order infringes the right to a fair trial has been discussed by the ECtHR in Menarini regarding the Italian competition authority. The ECtHR found that such an order does not infringe the right to a fair trial as long as a full appeal of the competition authorities' decision at a court is possible. One of the authorities not (yet) endowed with the right is the Swedish competition authority (Konkurrensverket (KKV)). In Sweden the topic has resurfaced as there is a new public inquiry arguing that KKV should be able to take the first-instance decision in all competition and merger application cases it investigates.

Should KKV gain the right to adopt decisions in competition infringement and merger applications a problem that appears is that KKV would both be investigating cases AND adopting decisions in these cases, even though these decisions would still be subject to court appeal. To adopt these decisions in a legitimate manner, it is important to discuss HOW they are taken. The public investigation discusses this issue with regard to the way KKV is organized.

There are two concerns that could be voiced. Firstly, whether the decision-making process could be influenced by politicians, for example to protect local industries. In Sweden, public authorities are independent from the government. In fact, the Swedish government is not allowed to adopt decisions in matters that are subject to the exercise of public authority towards individuals, where the decisions are to be adopted by independent public authorities (so-called ministerstyre) (RF 12:2). Thus, this is not a major concern in this case.

Secondly, the decision-making could be internally influenced by those who have investigated a given case, for exampple by case-handlers or heads of departments who want to establish a good track-record. What safeguards should be taken to prevent this problem? One option that is discussed in the public investigation is whether KKV should be lead by a board instead of by a director, as is currently the case. KKV would still have a director, but decisions in competition cases would be taken by the board consisting of a group of external experts and the director. This way of  leading a public authority is already employed for the Swedish post and telecom authority (PTS) which is in charge of regulating the markets for post and telecommunications. PTS makes similar assessments as regards competition law as KKV does and is thus lead by a board, ensuring maximum legitimacy in its decision-making. Oddly, the public investigation comes to the conclusion that KKV should not be lead by a board because of practical reasons, such as a lack of suitable experts that could be members on the board, few decisions taken and the time pressure associated with decisions in merger application cases. Some of thes issues could surely be solved, for example by only deciding on phase 2 mergers with the board? It appears odd that "practical issues" are allowed to take precedence over important legal considerations such as legitimacy and legal certainty, especially since the investigation finds that many practicing competition lawyers do not trust KKV to take decisions in competition cases. One could of course consider if the internal organization of KKV could be changed in such a way that any given investigation would be assessed by employees not involved in any given case. However, this would only be second-best to the assessment by experts whose loyalty is not associated with KKV.

To me, organizing KKV as an authority lead by a board of external experts appears like a good balance between taking decisions in competition cases more efficiently and in a legitimate manner at the same time. Practical reasons should be reconsidered, especially knowing that there is another Swedish authority (PTS) doing similar work being run that way. 


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